U.S. Tops List Of Best Countries For Women Entrepreneurs

Today from Istanbul, at the fourth-annual
Dell women’s entrepreneurs event, Dell announced the results of the first-ever global index to measure female entrepreneurship around the world. Not surprisingly, the more than 8 million women-led businesses in the United States came out on top.

According to Dell, the “Gender-GEDI” is the only such index looking specifically at high-potential female entrepreneurship based on aspiration, thriving business environments and entrepreneurial networks in each country. The research team looked at 30 indicators and ranked 17 countries for the inaugural list, which Dell executives hope to use to raise awareness about the importance of female participation in small business development globally.

“Unleashing the power of female entrepreneurship can have a dramatic effect on a country’s economy,” said CMO Karen Quintos in a press release that accompanied the report. “The research clearly supports the assertion that key things need to be fixed in order for female entrepreneurship to survive and flourish. Increased access to knowledge, networks, capital and technology are critical if countries are to empower female entrepreneurship and create a culture of success.”

While top-ranking countries performed consistently well across all 30 data points which included access to banking, education levels and economic development, the U.S. performed the best on indicators of good institutional foundations and a strong overall entrepreneurial environment, which put it at the top of the ranking.

The number and economic contributions of women-owned firms continues to grow year after year in the U.S. According to this year’s AMEX OPEN State of Women-Owned Business Report, the rate of growth in the number of women-owned enterprises over the past 16 years remains higher than the national average. Between 1997 and 2013, when the number of businesses in the United States increased by 41%, the number of women-owned firms increased by 59%. It’s currently estimated that the 8.6 million women-led firms in the country generate more than $1.3 trillion in revenues and employ nearly 8 million people.

The executive summary and full report can be found at dell.com/women but edited key findings from the report are as follows:

No single determinant of success

Top performing countries including the U.S. (No. 1) and Mexico (No. 5) scored consistently well across a wide range of indices, compared to low-performing countries, which were much more inconsistent. For example, India (No. 16) scored relatively high for ‘opportunity recognition,’ suggesting that the female population recognizes good opportunities for businesses where they live, but received low scores relating to ‘institutional foundations,’ indicating that the women’s ability to act on those perceived opportunities is limited.

Economic development is not enough

Being strong in key areas such as legal rights, education and access to finance do not automatically result in high-potential female entrepreneurship. In some countries, the business environment for success is right, but female entrepreneurship is still low. This is often due to social and cultural norms that make it less conducive for women to become entrepreneurs. Japan, U.K. and U.S. are all high income countries but Japan has the lowest percentage of female managers (9 percent) compared to U.S. (43 percent), leaving many women in Japan without the experience and skills to start their own businesses. This is the same for other low-performing countries; Turkey (10 percent), Egypt (11 percent) and Morocco (13 percent).

Lack of knowledge holds back business growth

There is a trend among less educated females in developing countries to take advantage of entrepreneurial opportunities, but without education they lack the skills to move their businesses beyond the micro level. With the exception of Japan (63 percent), only a relatively small percentage of female business owners in the low-performing countries are highly educated; Morocco (2 percent), Brazil (12 percent), Uganda (7 percent).

Access to finance is crucial

Few women have bank accounts in low-performing countries; Egypt (7 percent), Uganda (15 percent), India (26 percent) and Morocco (27 percent). This compares to almost 100 percent access in the top-performing countries, other than Mexico (22 percent). However, even in countries where access to a bank account is high, venture capital funding is still low. For example, in the U.S. only 3-5 percent of venture financing goes to women-owned businesses.

Effective networking can open doors

Networking with other entrepreneurs and having access to the Internet helps create opportunities for female entrepreneurs. In particular, the Internet provides new ways of networking that eliminate temporal and geographic, as well as gendered social constraints, that can limit women’s access to information and resources. In the U.K., 78 percent of Internet users are women, compared with less than 7 percent in India and Uganda.

Technology enables business growth

Technology is an essential component for fostering high-potential female entrepreneurship. While research and development does not guarantee successful growth, without systematic research activity, new product development and future growth will be inhibited. Turkey and Egypt scored very low in this area while Japan and the U.S. scored highly. Technology has also made it cheaper than ever to start a business and removes many of the social and physical barriers women must overcome to start their own businesses and connect with the resources they need. Entrepreneurs need scalable technology solutions that enable them to accelerate the growth of their business to succeed.